02104cam a22002537 4500001000600000003000500006005001700011008004100028100002500069245008100094260006600175490004100241500001900282520106400301530006101365538007201426538003601498690005001534690007501584710004201659830007601701856003701777856003601814w3934NBER20161209203718.0161209s1991 mau||||fs|||| 000 0 eng d1 aMishkin, Frederic S.10aAnatomy of a Financial Crisish[electronic resource] /cFrederic S. Mishkin. aCambridge, Mass.bNational Bureau of Economic Researchc1991.1 aNBER working paper seriesvno. w3934 aDecember 1991.3 aThis paper provides an asymmetric information framework for understanding the nature of financial crises. It provides the following precise definition of a financial crisis: A financial crisis is a disruption to financial markets in which adverse selection and moral hazard problems become much worse, so that financial markets are unable to efficiently channel funds to those who have the most productive investment opportunities. As a result, a financial crisis can drive the economy away from an equilibrium with high output in which financial markets perform well to one in which output declines sharply. The asymmetric information framework explains the patterns in the data and many features of these crises which are otherwise hard to explain. It indicates that financial crises have effects over and above those resulting from bank panics and therefore provides a rationale for an expanded lender-of-last resort role for the central bank in which the central bank uses the discount window to provide liquidity to sectors outside of the banking system. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aE05 - 2Journal of Economic Literature class. 7aE03 - Behavioral Macroeconomics2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w3934.4 uhttp://www.nber.org/papers/w393441uhttp://dx.doi.org/10.3386/w3934